FDA Publishes Fiscal Year 2016 User Fee Rates; Only a Modest Increase in PDUFA/BsUFA Rates, But Significant Hikes for Some GDUFA Fees

It’s that time of year again when FDA-regulated companies need to think about cracking open their checkbooks to pay FDA some pretty heft sums of cash for operations in the next fiscal year, and to plan ahead for submissions to FDA in the next fiscal year. Yep, you got it: it’s user fee season. On August 3, 2015, FDA published notices in the Federal Register establishing the Fiscal Year 2016 (“FY 2016”) user fee rates for several programs, including:

For several years now we’ve been tracking the changes in user fees rates FDA sets each fiscal year under PDUFA, and, more recently, under BsUFA and GDUFA. Almost in it’s 24th year, the historical increase in PDUFA user fee rates has been nothing short of astounding (and it’s a likely harbinger of what direction user fee rates in other programs will go in over the next decade or more). Looking at only the growth in the PDUFA application fee (see the table further below), the compounded annual growth rate is 14.11% for 24 years. Don’t we all wish we had an investment that did that well?! But enough daydreaming . . . on to the numbers.

The FY 2016 PDUFA application user fee rate is set at $2,374,200 for an application requiring “clinical data” (defined here in an FDA guidance document), and one-half of a full application fee ($1,187,100) for an application not requiring “clinical data” and a supplement requiring “clinical data.” These figures reflect FDA’s estimate of 119.545 fee-paying full application equivalents – an average of the number of full applications that paid fees over the lateset 3 years. This figure is higher than last year’s estimate of 115.042 fee-paying full application equivalents. Annual establishment and product fees have been set at $585,200 and $114,450, respectively, and are based on estimates of 485 establishments and 2,480 products.

The first table below shows the changes in PDUFA user fee rates for the latest iteration of the law – PDUFA V – and the next three tables chart the historical growth. Additional hisorical tables for user fee rates changes since the enactment of PDUFA are avilable here.

GDUFA establishes several types of user fees that together generated $299 million in funding for FDA in FY 2013 (including $50 million from the one-time ANDA backlog fee). That $299 million base amount is adjusted annually. The FY 2014 adjusted base figure was $305,659,000; in FY 2015, it was set at $312,224,000; and in FY 2016, it is set at $318,363,000. Three of the FY 2016 GDUFA user fee rates – application, Prior Approval Supplement (“PAS”), and Type II Drug Master File (“DMF”) – are up significantly vis-à-vis the FY 2015 user fee rates; however, the Active Pharmaceitical Ingredient (“API”) and Finished Dosage Form (“FDF”) facility fee rates dipped a bit vis-à-vis the FY 2015 user fee rates. This is exactly the opposite of what happened in FY 2015 when FDA hiked the API and DMF fee rates and reduced the application, PAS, and DMF fee rates.

The original ANDA and PAS fees, which make up 24% of the $318,363,000 (or $74,934,000 rounded to the nearest thousand dollars), are based on a total number of 1,005 fee-paying full application equivalents expected to be received in FY 2016. Dividing $76,407,000 by the total number of fee-paying full applications expedted to be received results in an original ANDA fee of $76,030 and a PAS fee of $38,020 for FY 2016.

The 1,005 fee-paying full application equivalents figure FDA identifies for FY 2016 is the lowest yet under GDUFA. FDA estimated 1,160 in FY 2013; 1,148.8 in FY 2014; and 1,276 fee-paying full application equivalents in FY 2015. This low number, combined with the portion of the adjusted base figure for applications and PASs (i.e., $74,934,000), largely explaines the nearly 30% fee rate increase over FY 2015. FDA figures show a downward trend in ANDA and PAS submissions. (See here for the latest FDA activity report, and here for the most recent GDUFA Performance Report.) If that trend continues (or if the number of submissions remains relatively static), then fee rates will continue to increase in subsequent fiscal years (because the adjusted base figure will almost certainly continue to increase).

The DMF fee, which makes up 6% of the $318,363,000 ($19,102,000 rounded to the nearest thousand dollars), is based on an estimate of 453 fee-paying DMFs in FY 2016. This is a big decrease over the 701 fee-paying DMFs estimated in FY 2015. The resulting fee is $42,170 for FY 2016 – a big increase over FY 2015.

The API and FDF facility fees are based on data submitted by generic drug facilities through the self-identification process. The FDF facility fee revenue makes up 56% of $318,363,000 ($178,283,000 rounded to the nearest thousand dollars), and the API facility fee makes up 14% of $318,363,000 ($44,571,000 rounded to the nearest thousand dollars). According to FDA, the total number of FDF facilities identified through self-identification was 705 (283 domestic and 422 foreign), and the total number of API facilities identified through self-identification was 826 (105 domestic and 721 foreign). These numbers translate into FY 2016 FDF facility fee rates of $243,905 for a domestic facility and $258,905 for a foreign facility, and API facility rates of $40,867 for a domestic facility and $55,867 for a foreign facility. These are minimal decreases compared to the FY 2015 FDF and API facility user fee rates, and are likely explained by the nominal increase in self-identified facilities. The table and chart below show the changes in GDUFA user fee rates for the first iteration of the law.